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Wednesday April 13, 08:04
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Aviva to expand its insurance business in China and India
(by Brigitta Zulfitzler)
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Aviva Plc, the U.K.’s biggest insurer, plans to double its licenses in China in the next five years and expand in India to reduce its reliance on European sales, Chief Executive Richard Harvey said.
The London-based Aviva, which receives 95% of its revenue from Europe, aims to grow Asian sales by 10% in five years, he said.
The company is expanding its influence in the two fastest-developing economies of China and India by cutting 1,700 jobs in the U.K. to reduce costs. The major Aviva’s rival seems to be Prudential Plc, which is operating in seven Chinese cities as the only foreign life insurer .
``It’s going to be a combination of growing our distribution and keeping our eyes open for one-off opportunities. Finding an acquisition that’s attractively priced is far from certain,’’ Harvey said in an interview marking that the goal is hard enough while many investors compete for the fruitful market.
Still, important factors of economic development and policies in the two markets may reward all the investing efforts, economists said. Aviva is expanding into India and China at a time when both states put into practice insurance reforms.
As far as China’s government is encouraging its 1.3 billion citizens to buy insurance instead of social insurance, life premiums grew by 30 % in the past five years to $39 billion in 2004. India’s insurance industry collected premiums for $18.8 billion in 2004.
According to analysts’ projections, China’s economy may grow by more than 8 % this year, while India’s growth may exceed 6 %.
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